Coal exploration licences under threat

COAL exploration licences that could deliver up to $175 million to the family of the Labor powerbroker Eddie Obeid are under threat after the NSW corruption watchdog announced there was an "urgent" need to advise the state government on what to do with them.

The Premier, Barry O'Farrell, wrote to the commissioner of the Independent Commission Against Corruption, David Ipp, on January 30 inviting him to give advice on the government's options for the licences granted to Cascade Coal in the Bylong Valley.

The ICAC is inquiring into whether the 2008 tender for the licences, which have led to windfall gains for the Obeid family, was corruptly run by the then mineral resources minister, Ian Macdonald.

Mr Ipp announced receipt of the letter before hearings began at the inquiry on Wednesday and said the commission was considering providing the advice.

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"In my view it is urgent that advice should be given to the government by the commission in regard to ensuring that the government has powers to take into account all matters of public interest in deciding what to do about the tenement," he told the inquiry.

Mr Ipp said he would provide the advice within 10 days.

The inquiry has previously heard that the Obeid family has made tens of millions of dollars from deals involving the exploration licences and stands to make up to $175 million if converted to a mining lease.

Mr O'Farrell has said that legal advice to the government has said it does not have the power to act to suspend or cancel the licences "until ICAC has made a finding and until action is followed as a result of that finding”.